Challenge to pension reform moves forward

Labor unions have scored two separate legal victories in the past week in their push to invalidate San Diego’s pension reform initiative, which voters overwhelmingly approved earlier this month.

The two wins essentially lead to the same result: The state’s Public Employment Relations Board can now move forward with its investigation into a labor complaint that city leaders violated state law by helping craft Proposition B as a citizens’ initiative.

Proposition B calls for replacing pensions with 401(k)-style plans for most new city hires and proposes a five-year freeze on the pensionable pay of current employees.

Unions are challenging that latter provision, saying it flies in the face of the city’s legal requirement to negotiate with labor over benefit changes.

Proposition B proponents say the initiative was placed on the ballot through a signature drive – not by city officials – and therefore no such negotiations were necessary.

The legal tussle began in February when an initial review of labor’s complaint by PERB found there was “reasonable cause” to believe the law had been broken. The board then sought a court injunction — which was denied — to block Proposition B from appearing on the June ballot. The city then successfully sought a delay in the PERB administrative hearings, set to begin April, until after the public vote.

The 4th District Court of Appeal ruled Tuesday that “the trial court erred” by delaying the PERB proceedings and that they should proceed. The ruling slapped down the city’s arguments that PERB wasn’t the proper venue to determine whether Proposition B was legal and said an unfair labor practice allegation falls within PERB’s exclusive jurisdiction.

In a separate ruling last week, the same appellate court denied City Attorney Jan Goldsmith’s request for it to consolidate the various legal challenges to Proposition B, skip a PERB hearing and rule on the issue.

Goldsmith said he hoped to avoid going before PERB because he believes the panel is labor-friendly and the outcome is predetermined. Any decision PERB makes would likely be appealed in court anyway and he hoped to expedite the legal process by skipping ahead.

“We tried to short circuit what could be months, years of who knows how many hearings,” Goldsmith said. “It’s pretty clear to us that PERB is a stacked deck.”

Goldsmith also said the PERB process won’t affect implementation of Proposition B because only a court can stop the city from moving forward.

Michael Zucchet, head of the Municipal Employees Association, which filed the initial PERB complaint, said it’s ironic that city officials are blaming unions for the delays when the PERB process would have been completed by now if the city hadn’t blocked it.

“I think it’s fair to say the city has expended a tremendous amount of resources over the last three or four months to avoid what apparently is going to be the inevitable of an administrative process at PERB,” he said. “So they may be downplaying it, but it doesn’t match up with the efforts they’ve put into it.”

PERB is expected to begin its hearing before an administrative law judge in July or August. The judge will make a ruling based on evidence from both sides and any decision can be appealed to the board. That ruling can then be appealed in court, all the way up to the state Supreme Court, if necessary. A final resolution could be years away.

Proposition B — crafted by Mayor Jerry Sanders and City Council members Carl DeMaio and Kevin Faulconer — was approved by 66 percent of city voters.